Wednesday, 13 August 2008

Buying Land in the Country for Emergencies

I listen to many podcasts, but my favorite at the moment is The Survival Podcast. The guy makes these podcasts while he drives to and from work. Apparently he drives 50 miles (80 kilometers) to work, which is incredibly far. (I only live about 25 kilometers from the city.) I am guessing he drives on the freeway to work because driving in regular traffic usually requires a lot of concentration, and you don't have the ability to concentrate on making a podcast while you're checking out traffic lights, watching pedestrians, changing lanes, etc.

The Survivial Podcasts (TSPC) is about survival. Surivival is the number one reason why I aim to be a millionaire by 35. TSPC claims that when many people think about survival and survivalism they think of the extreme survivalists, e.g. people who buy guns, stock up on food, live in the country, wear camouflage, etc. Some survivialists are environmental extremists who think that being self-sufficient is necessary to help the environment. The other extremists are skeptical of government and believe that the Illuminati control the world. TSPC wants to appeal to the mainstream, to teach them that many survivalist concepts can be applied by urban people.

In the car I have been listening to 15 No Risk Survival Tactics Anyone Can Implement. These tactics include the following: buy land in the country, stock up on food, get a second job and save up cash, get out of the stock market, have an evacuation plan, and many others.

Getting land in the country I think sounds good. I have been checking out Domain and prices of land in the country seem very cheap, about $20,000 or so compared to the clearly overpriced $400,000 houses in Australian capital cities. Even though my net worth is a little over $30,000 right now, I only have about $23,000 in liquid cash, so I could probably buy property outright. The Surivival Podcast claims that buying land in the country is a good safety net. If everything goes wrong, e.g. you lose your job, then you can always move to the country and live cheaply off your land. He claims that even if nothing goes wrong, you have an investment. This sounds rational.

Another piece of advice he gives is to stockpile non-perishable food. This is something I am uncertain about. The reason why is because food can easily rot (even non-perishable food can rot if not stored well) and food can be stolen easily. Buying non-perishable food can be a good hedge against food price inflation, but I happen to think that buying land in the country is a good hedge against food price inflation. The value of land in the country is related to how useful that land is. If food prices go up, land in the country is more valuable, and therefore prices of rural property in theory should go up as food prices go up. Land prices in urban areas however are likely to be influenced by the state of the economy in that urban area.

Another recommendation given is saving up cash and getting out of the stock market. This is where he and I diverge. TSPC is much more cynical than I am, believing that the economy is going downhill and will not recover for a long time. This pessimism is probably due to the fact that TSPC is created in the US where the economy is in fact doing terribly. Another problem is that saving up cash in the currency used in your own country means that you have a lot of faith in the fiat currency of that country. TSPC does in fact recommend people diversify currency by buying commodities and currencies of other economies, e.g. Japanese Yen or Euros.

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